Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25658 
Year of Publication: 
2007
Series/Report no.: 
Jena Economic Research Papers No. 2007,084
Publisher: 
Friedrich Schiller University Jena and Max Planck Institute of Economics, Jena
Abstract: 
Demographic change will be one of the major challenges for economic policy in the developed world in the next decades. In this article, we analyze the relationship between age structure and the number of startups. We argue that an individual’s decision to start a business is determined by his or her age and, therefore, that a change in a region’s age distribution affects the expected number of startups in the region. Using German regional data, we estimate a count-data model and find that the expected number of startups is positively influenced by the fraction of individuals of working age—20–64 years old. A more detailed analysis of the working-age distribution suggests that startups in knowledge-based (high-tech) manufacturing industries are affected by changes in this distribution whereas firms in other industries are not. In particular, increases in the fraction of individuals in the 20–30 age range and individuals in the 40–50 age range have a positive effect on the number of high-tech startups.
Subjects: 
Demography
Age Distribution
Entrepreneurship
Innovation
Region
JEL: 
J1
L26
O3
R11
Document Type: 
Working Paper

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